Unholy real estate strategy: Catholic churches shuffle properties to shield billions from sex abuse victims, report says

At least 20 dioceses use bankruptcy and legal entities to limit payouts to victims

TRD NATIONAL /
Jan.January 11, 2020 12:00 PM
Pope Francis (Credit: WIkipedia, iStock)

Pope Francis (Credit: WIkipedia, iStock)

Catholic church dioceses across the country are moving around their real estate portfolios and using Chapter 11 bankruptcy to protect assets in sex abuse lawsuits.

Over the last decade and a half, the U.S. Catholic Church has shielded more than $2 billion worth of assets from people who were abused by clergy, according to a Bloomberg Businessweek report. In some cases, that has significantly reduced the amount of money available to compensate those victims.

More than 20 dioceses have chosen to go the bankruptcy route since 2004 rather than face lawsuits.

Before filing for bankruptcy, many of those dioceses reorganize their structures and reclassified assets or transferred assets to separate entities. Some have broken off individual parishes into separate entities and transferred assets to them.

In 2012, the Archdiocese of Santa Fe began individually incorporating parishes and transferring assets to entities legally separate from itself. The archdiocese filed for bankruptcy in 2018 while facing several dozen abuse suits that later climbed to 375 claims.

The archdiocese is arguing in bankruptcy court that it was worth just $49 million and that another $178 million worth of assets associated with the archdiocese was owned by parishes or held in trust or foundation, so isn’t part of its estate.

Some bankruptcy judges have sided with victims. The Archdiocese of Milwaukee put $57 million into a trust fund in 2007 for cemetery maintenance, in what correspondence with the Vatican suggests was meant to shield it from legal claims. Victims’ lawyers successfully argued that money should be included in the archdiocese assets, making that money eligible to be used to compensate victims. [Bloomberg Businessweek] – Dennis Lynch


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Texas Republican Rep. Nicholas Van Taylor (Getty, iStock)

Congressman pitching high-risk lifeline for CRE

Congressman pitching high-risk lifeline for CRE
Related chairman Stephen Ross and Related Companies Portfolio CEO Richard O’Toole withBronx Terminal Market and Time Warner Center (Getty, Google Maps, Wikipedia)

Related lays out $200M debt settlement plan for Tel Aviv bondholders

Related lays out $200M debt settlement plan for Tel Aviv bondholders
(iStock)

TRD Insights: The 56 REITs whose bonds the Fed will buy

TRD Insights: The 56 REITs whose bonds the Fed will buy
A rendering of 100 Claremont Avenue, Melissa Burch of Lendlease and Ron Moelis of L+M Development Partner (Getty, Robert A.M. Stern Architects)

L+M, Lendlease snag $250M loan for UWS tower

L+M, Lendlease snag $250M loan for UWS tower
From left: 172 Madison Avenue, 100 East 53rd Street, Woolworth Tower, 53 West 53rd Street, 615 10th Avenue

Loan wolves: Bankers are stalking developers as debts come due

Loan wolves: Bankers are stalking developers as debts come due
Isaac Zion

SL Green’s co-CIO leaving firm

SL Green’s co-CIO leaving firm
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...